02 | 03 Exelon Corporation Progress Report: Environment, Safety

02 | 03 Exelon Corporation Progress Report: Environment, Safety, Community
table of contents
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Message from the Chairman
Executive Message: Environment, Health and Safety
Environmental Performance and Management
Air
Land
Water
Safety
Community
Economics
Environment and Safety Policies
Appendix A – Plant Data and TRI Emissions
Recognition and Awards
About Exelon
Powered by approximately 20,000 dedicated employees, Exelon Corporation is
one of the largest utilities in the United
States and is headquartered in Chicago,
Illinois, USA.
Exelon provides service to retail electric
customers in northern Illinois and
southeastern Pennsylvania – and gas
customers in the Philadelphia suburbs.
With more than 40,000 megawatts
of owned and controlled capacity, our
company features one of the nation’s
largest portfolios of electricity generation.
In 2002 and 2003, Exelon’s revenues
were, respectively, $15.0 billion and $15.8
billion. Exelon’s earnings were $1,440
million or $4.44 (diluted) per share in
2002 and $905 million or $2.75 (diluted)
per share in 2003. Additional information
on Exelon’s financial performance can
be found at www.exeloncorp.com.
Our Main Businesses
Exelon Generation is responsible for energy
generation and energy marketing, and
is made up of the following businesses:
Exelon Nuclear operates the largest
nuclear fleet in the United States and
the third largest commercial fleet in
the world.
Exelon Power manages, operates and
maintains the company’s fossil (coal,
oil and natural gas), landfill gas and
hydroelectric fleet of generating assets.
Exelon Power Team is the wholesale power
marketing division of Exelon Corporation.
Exelon Generation also has interests
in Sithe Energies, Inc. (50 percent).
Exelon Energy Delivery (EED) has the
largest electric customer base in the
nation, serving more than five million
retail electric customer accounts, as
well as approximately 460,000 natural
gas customers. EED companies include
Commonwealth Edison Company
(ComEd) that serves northern Illinois,
and PECO Energy (PECO) that serves
southeastern Pennsylvania.
Exelon Enterprises comprises the
energy services business of Exelon
Services, Inc., an infrastructure services
business, a communications joint
venture, and other investments. In
2003, Exelon sold, or signed agreements
to sell, several Enterprise businesses,
including the majority of InfraSource
and Exelon Thermal.
Exelon Business Services Company (BSC)
is a direct, wholly owned subsidiary of
Exelon Corporation. BSC provides
Exelon’s businesses with information
technology, supply management, legal,
finance, human resources, and audiovisual services.
Report scope
The information contained within the
Exelon Corporation Progress Report:
Environment, Safety, Community covers
performance, programs, and activities
for the years 2002 and 2003. Discussion
of programs and metrics within each
section of the report identify the involved
Exelon businesses and identify the
relevant scope of information presented.
In some cases, data and discussion of
activities from years prior to 2002 are
provided as context for discussion of
progress in 2002–2003. Environmental
and safety performance data related
to Exelon Generation’s interest in Sithe
Energies, Inc. (50 percent) are outside
of the scope of this report. However, the
location of Sithe Energies’ generating
plants is contained in this report’s map
of North America.
2003 Exelon Generation Output Mix
[MWh – owned generation]
Nuclear
Coal
Oil
Gas
Hydro
83%
6%
6%
2%
3%
Exelon Distribution and Generation
Exelon Distribution Territory
PECO Energy
Serving 1.5 million electric customers & 460,000
natural gas customers in Southeastern Pennsylvania
Commonwealth Edison (ComEd)
Serving 3.6 million electric customers in Northern Illinois
Exelon Generating Stations (owned)
Fossil / Hydro Plants
Exelon / Sithe Plants
Nuclear Units
The Exelon Way | Our commitment to environmental and safety performance is linked solidly to our corporate
strategy. Our Vision is to create exceptional value by becoming the best and most consistently profitable electricity and
gas company in the United States. So, in January 2003, we initiated The Exelon Way, an aggressive and comprehensive
effort to reexamine, and ultimately transform, the way Exelon does business: to energize our workforce, to centralize
key functions, to optimize work processes, to emphasize our commitment to customers, employees and the communities
we serve and to maximize our competitive position and cash flow. In short, the Exelon Way is about being the best at
everything we do, including constantly improving our environmental and safety performance.
Message from the Chairman
This is the second in a series of what will become annual reports
documenting Exelon’s progress toward environmental and safety
excellence. Taken together, the reports will serve as an important tool
in our ongoing effort to continuously improve our environmental and
safety performance. Of necessity, they will highlight both our successes
and our shortcomings. Over time, however, they will document our
determination to excel at delivering reliable, safe and clean electric
service to our customers and the communities in which they live
and work.
In our Corporate Vision Statement, we aspire to become the best
and most consistently profitable electricity and gas company in the
United States. Keeping the lights on, performing safely, and constantly
improving our environmental performance are all key commitments
in realizing that ambition. We are currently engaged in an aggressive
and comprehensive company-wide effort, dubbed The Exelon Way, to
achieve our goals by reexamining and ultimately transforming the
way we do business.
We are already seeing tangible results from The Exelon Way, and
we are already seeing tangible improvements in our environmental
and safety performance. New environmental management systems
are under development, new metrics to measure quarterly environmental performance are being employed, and, under the leadership
of Betsy Moler, a new Environmental Council comprised of senior
executives has been initiated to integrate environmental considerations
into our day-to-day business. I am pleased to report that EED successfully reduced its own energy consumption by 4 percent in 2003; we
hope to realize similar reductions across the company in 2004. I am
equally pleased that EED had its best safety year ever in 2003: PECO’s
performance, measured in lost workdays, was well above industry
standards; ComEd saw a dramatic improvement.
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But we have more to do. Global climate change is a serious issue,
one that the utility industry must address. In 2003, Exelon completed
its inventory of greenhouse gases in accordance with the protocol
developed by the World Resources Institute/World Business Council
on Sustainable Development, and added to our carbon-offset projects.
We remain active participants in the U.S. EPA Climate Leaders program.
We are also working with the National Commission on Energy Policy
to ensure that low-carbon alternative fuels, including natural gas,
nuclear and sustainable renewables, are available to meet our future
energy needs.
As you read this report, keep in mind that we aspire to more than
minimal environmental and safety compliance. We seek to create
a culture of excellence here at Exelon, one that allows us to be the
best at everything we do. We fervently believe that keeping our key
commitments to the communities we serve, whether through environmental excellence or through our support for diversity, education or
the arts, will enable us over time to be the recognized industry leader,
delivering extraordinary service to customers, and extraordinary
value to our shareholders.
Very Truly Yours,
John W. Rowe
Chairman and Chief Executive Officer
Executive Message: Environment, Health and Safety
Exelon operates in, and supports, competitive electricity markets at
both the wholesale and retail levels. This creates opportunities for us
not only to improve the financial performance of the company, but
also to improve our environmental, safety, and community performance.
We are firmly committed to meeting the requirements of all environmental laws and regulations, and the exacting performance standards
that our customers, employees, and shareholders deserve.
At the corporate level, environmental issues command the highest
levels of executive attention and involvement. We have recently formed,
and jointly chair and manage, an Environmental Council that includes
executives from every sector of the corporation.
In the past two years, we have been laying a foundation for substantial environmental performance improvements, by investing in
emission control technology, by clarifying responsibilities and procedures, and by pursuing innovation. For example, we will implement,
by year-end 2004, an enterprise-wide Environmental Management
System (EMS) that meets ISO 14001 standards. We are verifying our
greenhouse gas inventory, and will commit to a reduction goal in
2004, in our commitment to the U.S. EPA Climate Leaders Partnership.
We have invested in operational efficiency, such as nuclear and hydroelectric uprates that deliver more power and avoid significant air
emissions versus fossil-based alternatives. We have invested more than
$73 million in NOx emission control equipment. At one of our nuclear
plants we are using recycled mine water for cooling.
We continue to support voluntary biodiversity projects that improve
our communities and regions. In the following pages, you will see our
commitment: our support of environmental groups, our investments
in carbon sequestration through planting of trees and prairie grass,
and our work on biodiversity – especially in efforts to restore native
river fish populations in Pennsylvania and Illinois.
While we made progress in the years 2002-2003, our environmental
and safety performance results were mixed. We still have a number of specific areas for improvement; for example, opacity issues need further work.
Safety is a serious issue. Our goal is absolute: no one gets hurt. Period.
In many ways, our record has improved. However, we had three employee
fatalities in 2002, which shook us. Our reaction was both immediate and
extensive. We analyzed the incidents from every angle and took actions
to eliminate potentially hazardous practices and situations. No fatalities
occurred in 2003, and we simply must carry this record forward. We are
continually assessing safety programs for opportunities to re-invigorate
employee involvement in accident prevention, to minimize risk, and to
keep our focus on the value of safety in all operations.
We are also taking actions to improve the quality of life for the
people who live and work in our service territories. We are demonstrating
that corporate giving can both serve the community and increase
business value. From art exhibits that teach environmental stewardship,
to innovative educational programs for inner-city youth, to ensuring
the diversity of our workforce and suppliers, we are giving back, in a
small way, to the communities in which we operate.
Looking forward to 2004, Exelon is setting challenging goals for
emissions reduction and efficiency improvements. We are developing
a company-wide environmental awareness-training program. We are
also looking to improve communication and reporting to our stakeholders. This report is a step in that direction.
Elizabeth A. Moler
Executive Vice President,
Government and Environmental
Affairs & Public Policy
pictured top to bottom:
Elizabeth A. Moler
Helen A. Howes
Helen A. Howes
Vice President,
Environment, Health and Safety
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Environmental Performance: Accomplishments and Goals
2003 Accomplishments
Improving internal energy efficiency: Exelon
Energy Delivery (EED) exceeded its goal of
improving energy efficiency at facilities by
3 percent, achieving a 4 percent reduction.
Environmental products and services: EED met
its goal of generating $1.6 million in earnings
from products and services with environmental benefits – including energy management
systems and heat pumps.
Governance: Established a corporate
Environmental Council of executives who
serve as sponsors for environmental initiatives in business units and who address
emerging issues.
Climate change: Joined U.S. EPA Climate Leaders
Partnership to work towards a voluntary commitment to reduce greenhouse gases (GHG).
Environmental management: Set goal to
establish a corporate-wide environmental
management system by the end of 2004,
and made substantial progress towards that
goal. Updated Exelon’s Environment Policy;
reviewed and clarified roles and responsibilities; began assessments of environmental
positions and impacts.
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Renewable energy: Gained regulatory approval
to offer a retail wind product in the PECO
Energy service territory starting 2004. Agreed
to purchase the entire output of the 51 MW
Crescent Ridge wind energy project in Illinois.
Power Team added 129 MW of wind generation
to its portfolio in 2002-2003.
Resource management: Collected operating
data across the company to set a baseline
level for water usage, waste generation, and
recycling; developing targets for improvement.
2004 Goals
Compliance: Continue to work towards achieving 100 percent compliance with environmental
regulations and eliminating preventable spills.
Improving internal energy efficiency:
Improve energy efficiency of EED facilities by
an additional 3 percent; develop a plan to
expand energy efficiency program to Exelon
Generation in 2004.
Environmental products and services:
Measure and report revenue generated from
existing products.
Communications: Improve employee and
stakeholder understanding and awareness
of Exelon’s environmental performance.
Climate change: Develop a GHG goal for EPA
Climate Leaders Partnership.
Environmental management: Develop a
recommendation for ISO certification of
environmental management system; establish
system by year-end.
Renewable energy: Develop a strategy to
address renewable resources.
Resource management: Develop a water use
management plan; generate less than 1,000 kg
of hazardous waste per nuclear site per month;
investigate establishing more aggressive goals
for recycling municipal solid waste streams
at EED and Exelon Power – 20 percent and
15 percent, respectively.
Stakeholders: Identify opportunities to work
with key stakeholders to advance common
environmental goals.
Environmental Management
Taking a management system
corporate-wide
Integrating environment across
the business
To improve environmental performance and
to more effectively manage environmental
risk, Exelon is establishing a corporate-wide
environmental management system (EMS).
We have designed our EMS to conform to the
International Organization for
Standardization specification ISO 14001 for
environmental management, and plan to
have it in place by the end of 2004.
Our EMS will improve the efficiency and
effectiveness of the environmental management functions and enable continuous
performance in four ways: by clarifying
environmental expectations and goals; by
standardizing the way we manage environmental issues across the business; by creating
clear accountability for the environment from
the Chairman and CEO down through the
organization; and by linking environmental
programs more directly with the business
planning process.
Establishing the Exelon Environmental
Council, under the leadership of Betsy Moler,
Executive Vice President, Government and
Environmental Affairs and Public Policy, is
another step we took in 2003 to improve our
environmental performance. Senior executives
from across the company are involved in the
Council and represent:
Exelon Public Policy: Elizabeth A. Moler,
Exelon Executive Vice President, Government
and Environmental Affairs & Public Policy
Exelon Power Team: Kenneth W. Cornew,
Senior Vice President
Exelon Energy Delivery: John T. Costello, Senior
Vice President, Customer & Marketing Services
Exelon Energy Delivery: Craig L. Adams,
Senior Vice President, Support Services
Exelon Business Services Company:
Edward J. Cullen, Vice President & Deputy
General Counsel, Corporate & Commercial
Exelon Nuclear: Jeffrey A. Benjamin, Vice
President, Licensing & Regulatory Affairs
Exelon Congressional Affairs: David C. Brown,
Vice President, Congressional Affairs
PECO Energy: Lisa Crutchfield, Vice President,
Regulatory & External Affairs
Exelon Corporate Environment, Health & Safety:
Helen A. Howes, Vice President, Environment
Health & Safety
Exelon Power: Theodore E. Jennings, Vice
President, Engineering & Operations Support
Exelon Public Policy: R. Scott Brown, Vice
President & Director of Policy Development
Exelon compliance assessment programs
Operating units within Exelon have implemented various types of periodic self-assessment
programs, inspections of operations, and
behavioral observation programs to assure
that continuous improvement is being made
in Exelon’s compliance results. Since Exelon
was formed in 2000, it has had a corporatewide uniform independent environmental
health and safety compliance audit program
to provide advice to Exelon management on
the status of Exelon’s compliance in these
areas throughout the corporation and to
identify areas where additional focus is
warranted. During the past two years the
audit teams, consisting of lawyers, environmental and safety professionals from corporate
Environmental Health and Safety, and a
team of outside auditors certified by the
Environmental Health and Safety Auditor
Certification Board, have completed approximately 50 compliance audits at facilities,
including nuclear, fossil, energy delivery,
thermal, gas distribution, and training and
technical centers.
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Air | Delivering more clean power: 1,070 MW of nuclear uprates
Through uprates and efficiency upgrades to its nuclear fleet during 2002, Exelon added approximately 540 megawatts
(MW) of capacity. In fact, since 1999, we have added 1,070 MW through uprates and efficiency projects – enough to
serve more than 1 million average residential customers. This added capacity annually avoids more than 9 million tons
of carbon dioxide (CO2) emissions to the atmosphere compared to adding the same amount of coal-fired generation.
Uprates increase the capability of a nuclear unit by increasing the reactor’s power “rating,” allowing the unit to produce
more electricity, safely. All power uprates must be authorized by the Nuclear Regulatory Commission (NRC), after comprehensive safety analyses and equipment modifications. The goal of our ongoing Uprate and Efficiency Program is
to meet growing energy needs safely, while reducing the need to construct new plants – and without increasing air
emissions. By the end of 2006, we plan to add an additional 76 MW through uprates.
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Exelon accomplished a great deal in air quality
improvement in 2002 and 2003, by reducing nitrogen
oxide (NOx) and particulate emissions, and delivering
more clean power. We also continued our focus on
climate change.
In initiatives throughout the company, we demonstrated our commitment to federal air quality
standards and our support of federal multi-pollutant
legislation for utilities. During the coming decade,
we expect additional regulations to require further
emission reductions of NOx, SO2, mercury, and
possibly CO2. Exelon joined national organizations,
like the U.S. EPA’s Climate Leaders Partnership, to
develop a corporate greenhouse gas goal. We also
made big investments to meet new regulatory
requirements, such as $73 million in equipment
to reduce NOx emissions.
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Emissions performance that beats
industry averages
Generating electricity with fossil fuels produces
a range of air emissions and greenhouse
gases. As the charts on the right show, our air
emissions per unit of energy produced are
very low compared to the industry across all
major emissions – as measured against the
year 2000 U.S. electric utility average (EUA).
These air emissions metrics represent all
sources of Exelon-owned generation, including
our shares of Keystone and Conemaugh, but
excluding our share of Sithe Energies, Inc.
Nuclear generation constitutes the most
of our generating capacity and is the main
driver behind Exelon’s low emission rates,
as this technology relies on nuclear fission
rather than combustion of fossil fuels as its
primary energy source to generate electric
power. Other contributions come from Exelon
Power’s non-emitting Conowingo Hydroelectric
Station, which set an all-time generation
record in 2003, the use of advanced pollution
controls at our fossil-generation plants, and
additional generating capacity achieved
from Exelon’s nuclear and hydro uprate and
efficiency programs.
Reducing nitrogen oxide (NOx) emissions
During the summer months, NOx emissions
from sources such as power plants and automobiles can combine with volatile organic
compound (VOC) emissions from other
sources to form ground-level ozone. Exelon
Power’s fossil units in the northeast have
operated since 1999 under the Ozone
Transport Commission (OTC) NOx cap and
trade program. Starting May 1, 2003, those
units began operating under a tighter
emission-reduction regime that covers 19
eastern states under a U.S. EPA regional NOx
reduction program. In addition, our fossil
units in Texas are operating under aggressive
state-level NOx reduction programs.
In response to such regulation, we have
installed NOx controls on some units and
adopted other operating practices to reduce
NOx emissions. Our NOx emissions declined
by 18.0 percent between 2001 and 2002, and
further declined 5.8 percent between 2002
and 2003. Reductions were due primarily to
new NOx controls used during the summer
months. Reduced fossil generation also
contributed to the reduction between 2001
and 2002, but not 2002 versus 2003. As the
graph to the right reveals, our 2003 NOx
emission rate was 92.6 percent lower than
the U.S. EUA average.
NOx Air Emissions [thousand tons]
19.1
Exelon 2002
18.0
Exelon 2003
NOx Air Emissions Compared to the (EUA)
Electric Utility Average* [lbs/MWh - all source]
2.96
EUA 2000
Reducing NOx by installing new
control equipment
During 2002 and 2003, Exelon Power invested
more than $73 million in additional NOx
controls at the Eddystone Generating Station
in Pennsylvania and the Handley and Mountain
Creek Generating Stations in Texas. These
controls will play a major continuing role in
improving air quality and allowing adequate
operation of the Pennsylvania and Texas fleets
as our allocation of NOx emission allowances
under regulatory programs declines over time.
Coal-fired boiler units 1 and 2 at Eddystone
were retrofitted with Selective Noncatalytic
Reduction (SNCR) technology to augment
the existing technology and reduce NOx
emissions by an additional 30 percent. Gasfired boiler units 4 and 5 at Handley and unit
8 at Mountain Creek were retrofitted with
Selective Catalytic Reduction (SCR) technology,
which reduces NOx emissions more than
90 percent.
Exelon 2002
0.25
Exelon 2003
0.22
Reducing sulfur dioxide emissions
Sulfur dioxide (SO2) emissions contribute to
acid rain, regional haze, and fine particulate
formation. To reduce SO2 emissions, all three
coal-fired units operated by Exelon Power
utilize SO2 scrubbers capable of removing up
to 90 percent of SO2 emissions. The western
Pennsylvania coal-fired Conemaugh Station,
operated by Reliant Energy, of which Exelon
owns 20.72 percent, is also SO2-scrubbed.
The majority of Exelon’s SO2 emissions
are associated with its ownership interest
(20.99 percent) in the coal-fired Keystone
Plant, also operated by Reliant, in western
Pennsylvania. Keystone accounts for roughly
60 percent of Exelon’s annual SO2 emissions.
Exelon also operates a number of oil-fired
units that account for a much smaller share
of Exelon’s SO2 emissions. A number of these
oil units operate in urban areas and are
required by permit to use lower sulfur oil.
Exelon’s SO2 emissions declined by 16.4 percent
between 2001 and 2002, and increased by
16.7 percent between 2002 and 2003.
Reductions between 2001 and 2002 were
due primarily to reduced coal-fired power
generation. Coal-fired generation in 2003
was more reflective of historic levels. Exelon’s
2003 SO2 emission rate is 88.4 percent lower
than the U.S. EUA average.
SO2 Air Emissions [thousand tons]
49.0
Exelon 2002
57.2
Exelon 2003
SO2 Air Emissions Compared to the (EUA)
Electric Utility Average* [lbs/MWh - all source]
6.04
EUA 2000
Exelon 2002
0.64
Exelon 2003
0.70
CO2 Air Emissions [million tons]
13.9
Exelon 2002
18.5
Exelon 2003
CO2 Air Emissions Compared to the (EUA)
Electric Utility Average* [lbs/MWh - all source]
1,392.46
EUA 2000
Exelon 2002
Exelon 2003
181.08
225.90
* National EUA derived from U.S. EPA Emission & Generation Resource Integrated
Database, eGRID, version 2.0. “all source” lb/MWh emission rate equals fossil emissions
divided by MWh from all sources of generation, including fossil, hydro and nuclear.
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Exelon Power TRI Reported Total Releases
and Offsite Transfers* [million pounds]
5.4
Exelon 2001
4.9
Exelon 2002
*2003 TRI emissions will be compiled and reported
to the EPA after the publication date of this report.
Reducing Toxic Release Inventory (TRI)
Emissions 2001 and 2002
In 1998, the U.S. EPA added electric utilities
to the list of industries that must report
the annual release and transfer of certain
substances. This reporting requirement is
listed under Section 313 of the Emergency
Planning and Community Right-to-Know Act
authorized in 1986 by Title III of the Superfund
Amendments and Reauthorization Act. Exelon
Power is the only business unit that meets TRI
reporting thresholds and is required to submit
emissions data to EPA.
The above chart summarizes total releases
and offsite transfers during 2001 and 2002.
TRI emissions declined by 9.3 percent between
2001 and 2002, due primarily to reduced fossil
generation. A complete listing of Exelon Power’s
TRI emissions by chemical compound, including
mercury, is contained in Appendix A. Additional
information on the TRI program is available
on the U.S. EPA website at http://www.epa.gov.
Exelon’s Toxic Release Inventory (TRI) report
represents data from Exelon Power facilities
required to report, including our shares of the
Keystone and Conemaugh plants.
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Managing greenhouse gas emissions
Improving air quality in our vehicle fleets
Fossil generation emits several types of greenhouse gases (GHGs), with CO2 representing
by far the largest quantity of GHG emitted.
Exelon’s CO2 emissions declined by 15.2 percent
between 2001 and 2002 due primarily to
reduced coal generation. Our CO2 emissions
increased by 33.1 percent between 2002 and
2003 due to increased coal-fired generation,
and the new Mystic and Fore River combined
cycle units that became operational during
2003. Our 2003 CO2 emission rate is 83.8
percent lower than the U.S. EUA average.
Since 1991, Exelon has voluntarily undertaken more than 30 projects to reduce GHG
emissions. We report these projects to the U.S.
Department of Energy 1605(b) program. Our
most recent report, for 2002, reported 33
projects with emissions avoidance and offsets
of 7.1 million tons of CO2-equivalent. Those
projects include 11 renewable projects (wind,
solar, and hydro, totaling 191.7 thousand tons),
ten nuclear uprates (6.7 million tons), three
landfill gas projects (154.7 thousand tons), four
sequestration projects (8.5 thousand tons), and
five other projects. In 2004, Exelon will assess
the impact of recently proposed changes to
the 1605(b) program on our prior reporting.
In 2003, we joined the U.S. EPA’s Climate Leaders
Partnership, and began development of a
corporate-wide GHG inventory, climate change
strategy, and goal.
The ComEd Biodiesel Program
Partners for Clean Air has acknowledged
ComEd’s participation in the Illinois EPA’s Green
Fleet Program. We voluntarily use more than
1.7 million gallons of biodiesel fuel to power
about 1,600 ComEd diesel vehicles. This is
more than 15 percent of the biodiesel used
in the Midwest region and four percent of
U.S. consumption. The quantity of biodiesel
consumed by ComEd during 2003 cut particulate emissions by 290 tons.
PECO Natural Gas Vehicle Program
As a natural gas supplier, we are mandated
by the Energy Policy Act of 1992 (EPACT) to
procure light-duty vehicles capable of burning
alternative fuels such as ethanol, propane,
and clean-burning compressed natural gas
(CNG) – our fuel of choice. We also supply CNG
for privately owned vehicles and fleets, through
PECO-owned CNG fueling stations and stations
owned by fleet operators. In 2003, PECO and
its customers’ fleets increased CNG use by more
than 10 percent, displacing 250,000 gallons of
gasoline and diesel fuel.
As a major participant in the Greater
Philadelphia Clean Cities program, PECO is
often sought out for advice in support of
those interested in CNG vehicle procurement
and fueling.
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Exelon Notices of Violation (NOV) - Air
[number of NOVs]
Exelon 2001
3
5
Exelon 2002
Exelon 2003
Radiation dose to the public
Improving opacity control
Radiation dose to the public from the operation of our nuclear power plants is monitored
under U.S. Nuclear Regulatory Commission
(NRC) regulations and is documented in
each site’s Annual Radiological Effluent
Release Report and Annual Radiological
Environmental Operating Report. Each reactor
in the Exelon Nuclear fleet is required to
monitor releases through the sampling of
air and water discharge points. Each nuclear
site has operating procedures and process
systems designed to minimize environmental
releases of radioactivity to well below site
and regulatory allowed quantities, with an
emphasis on protecting the health and safety
of the general public. To validate the measurement of radioactive releases from the
station, each site acquires off-site samples
of items such as milk and vegetables from
the surrounding communities to analyze for
radioactivity. The results of the analyses are
incorporated into the annual radiological
effluent reports that are public records and
are incorporated into the NRC routine inspection process. In 2003, the radiation dose
to the public from the operation of Exelon
Nuclear power plants was well below any of
the established site or regulatory limits.
Control of opacity was the subject of an EPA
Notice of Non-compliance at the oil-fired
Delaware Generating Station units 7 and 8
in 2002. Exelon Power provided EPA with a
plan for future hardware equipment installation and management controls. In March
2003, Exelon and EPA entered into a $20,000
Consent Order that accepted our plan for
future controls.
In 2003, under a Consent Assessment of
Civil Penalty with the Pennsylvania Department of Environmental Protection for alleged
opacity exceedances at our Cromby and
Eddystone Generating Stations in 2002, we
paid penalties of $7,000 and $15,000 respectively. The facilities continue to improve the
performance of the units to reduce instances
where the opacity limitations are exceeded.
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Measuring Compliance –
Notices of Violation (NOVs)
Environmental agencies issue a notice of
violation (NOV) when a company is believed
to have violated a permit condition or regulatory
requirement. NOVs can be issued for actual
events with direct environmental consequences
not allowed by permit or regulation, and for
administrative events without direct environmental consequences, such as late reporting.
The most significant air NOV received by
one of Exelon’s subsidiaries during 2002-2003
related to opacity issues at the Mystic oil-fired
units 4, 5, 6, and 7 located in Everett, Ma., during the period June 1998 to March 2003. The
Company that owns Mystic was acquired by
Exelon in November 2002 and took a number
of actions to reduce opacity before receiving
an NOV, including investing millions of dollars
to upgrade hardware, repair equipment, and
revise operating procedures. To resolve the NOV,
Exelon’s subsidiary entered into a $3.96 million
settlement agreement with the U.S. EPA in
December 2003. Also, apart from the agreement,
Exelon voluntarily retired Mystic units 4, 5,
and 6 in December 2003. Output from these
old units has been replaced by new gas-fired
combined-cycle generation.
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Land | Completing cleanup of a manufactured-gas plant site
With the successful completion of remedial activities at the Swedeland Road Substation property, PECO reached a
significant milestone in its Manufactured-Gas Plant (MGP) site closure program. From about 1940 to 1972, a former
quarry at the nine-acre site in Upper Merion Township, Pa., was used for the disposal of filter media used to remove
impurities from manufactured-gas streams. The site was also reportedly used once or twice for the disposal of MGPrelated tank-bottoms and construction debris. From 1964 to the present, PECO has utilized the site as a transformer
substation. Our closure of the site under Pennsylvania’s Land Recycling Program, known as Act 2, is part of a cleanup
of sites related to manufactured-gas production. The process for the site began in 2001, and we submitted a Remedial
Investigation Report (RIR) and Cleanup Plan for the site in June 2002. Remediation activities were completed in 2003.
PADEP is currently reviewing a final report on the cleanup of the site. We are now looking at options to lease a portion
of the property for a suitable non-residential use – making this Act 2 closure a complete success story.
13
L
land
During 2002 and 2003, Exelon continued cleanup
and environmental remediation at a number of
properties that we own or that were owned by
predecessor companies. These include 69 former
manufactured-gas plant sites used prior to the 1950s
to manufacture gas from coal or oil, and a former
generating plant, which was cleaned up under a
unique partnership to bring new jobs to the City
of Chester, Pennsylvania.
We made progress in developing more efficient
corporate-wide recycling and waste management
programs and in reviewing the life-cycle impacts
of our purchasing policies.
Further, we helped promote biodiversity through
projects such as carbon sequestration, in which we
joined a number of public/private partnerships to
plant trees and prairie grasses.
14
Cleaning up at other
manufactured-gas plants
Redeveloping the waterfront
in Chester, Pennsylvania
Exelon’s predecessors included companies
that owned and operated manufactured-gas
plants (MGPs), used prior to the 1950s to
manufacture gas from coal or oil. We are
responsible for the investigation and remediation of 69 former MGP sites in Illinois and
Pennsylvania. In conjunction with federal,
state, and municipal organizations, and other
utilities, we are managing these responsibilities through remediation programs begun
in the early 1990s.
In Illinois, ComEd has completed cleanup
of six of 42 sites that have been assessed
and prioritized. As of 2003, 22 sites are in
active investigation and remediation phases
throughout Illinois. In Pennsylvania, PECO
Energy has completed cleanup of seven
sites of the 27 that have been identified. As
of 2003, 10 of the 27 sites are undergoing
investigation or remediation.
Working with the Illinois EPA, the City of
Chicago, and other Illinois utilities, ComEd
has helped lead an Electric Power Research
Institute study to evaluate polycyclic aromatic
hydrocarbon levels in urban surface soils.
Based on this work, new industry-wide standards were developed to help supplement
current regulations for safe, economical MGP
site cleanups. PECO Energy is also working
to complete a similar study.
Exelon forged a partnership with Preferred
Real Estate Investments, Inc., to redevelop
approximately 90 acres of riverfront property,
while creating new jobs in the City of Chester,
Pa. We are donating seven acres of the riverfront land to the City of Chester for expansion
of the adjacent city park. We will sell 63 acres
to Preferred for their “Wharf at Rivertown”
project, and we will retain the remaining
20 acres for power generation and related
utility activities.
This cleanup is being done through
Pennsylvania’s Land Recycling Program,
known as Act 2, which emphasizes site
cleanup consistent with future land use. The
site investigation and cleanup has involved
an effort among Exelon, the Pennsylvania
Department of Environmental Protection
(PADEP), and the U.S. EPA to expedite site
redevelopment while protecting human
health and the environment.
We completed all remediation requirements under the Buyer-Seller Agreement
with PADEP and Preferred by the end of 2003.
In addition, we installed a groundwater total
interceptor trench along the shoreline on a
portion of the site to mitigate any seepage
to the Delaware River.
Removing PCBs and mercury
from the EED system
Measuring the value
of recycling programs
Expanding safe storage
for spent nuclear fuel
Exelon Energy Delivery’s phase-out plan for
equipment containing poly-chlorinated
biphenyls (PCBs), instituted more than a
decade ago, has moved the company from
among the largest users of such equipment
to a position of operating only a few pieces. In
2003, we accelerated the process, and removed
911 PCB capacitors from the system.
We have now removed or replaced almost
all PCB sources, including all known PCB transformers in commercial buildings, all known PCB
distribution equipment outside of substations,
65 percent of all PCB capacitors in PECO Energy
substations, and 95 percent of all PCB capacitors
in ComEd substations. A limited number of
PCB transformers and/or capacitors remain in
service at several of Exelon’s fossil and nuclear
plants. This equipment is monitored and periodically reviewed for replacement or retrofit.
PECO Energy’s program to remove all known
mercury-containing natural gas regulators
from homes and businesses, begun in 1996,
has identified and replaced approximately
7,480 mercury regulators. Old regulators are
disposed of in accordance with hazardous
waste regulations. In this continuing program,
PECO replaced 30 more in 2003 and identified
a number of other possible locations. Plans are
under way to further identify and replace all
remaining mercury regulators.
For many years, Exelon has maintained recycling programs to collect and reuse a wide
range of materials. These programs provide
measurable value by reducing waste and
waste disposal costs, as well as by the sale of
recycled material. As one of the strategic
initiatives under the environmental strategy
we began to implement in 2002, we formed a
team to track the current recycling programs
and identify opportunities for additional cost
savings through waste minimization. The
team’s work led to the establishment of a
corporate-level performance goal to increase
the recycling of municipal waste and reduce
generation of hazardous waste, thereby
creating additional cost savings.
By year-end 2003, Exelon’s nuclear plants had
produced approximately 9,900 tons of spent
nuclear fuel during their operating lives. The
combined volume of this spent fuel is roughly
the size of a large community swimming
pool. This waste will eventually be stored in
the permanent repository for the nation’s
nuclear waste that Congress resolved in 2002
should be constructed at Nevada’s Yucca
Mountain. The Department of Energy (DOE)
expects it to begin operation in 2010. In the
interim, Exelon will continue to safely and
securely store high-level waste in water-filled
pools and dry storage containers at its plants.
We are continuing to expand our storage
capacity by constructing state-of-the-art dry
storage systems, which can also be used by
DOE to transport spent fuel to the national
repository when it becomes operational.
After public consultation and NRC approval,
we constructed and are now operating new
dry storage facilities at our Dresden, Peach
Bottom, and Oyster Creek nuclear plants.
Another facility is planned for completion
in 2005 at Quad Cities.
Exelon Corporation
2003 Recycled Materials [tons]
Recycled Materials
Quantity
Metals
Universal waste
Paper
Untreated wood
Used oil
Ash to beneficial use
MgSO3 to beneficial use
8,688
687
1,428
817
2,619
175,700
28,800
15
Reusing coal combustion byproducts
Exelon is committed to reusing the byproducts
of fly ash, bottom ash, basin ash, and fluegas desulfurization products from our fossilgenerating stations. We have used these
materials for restoring land contours at coal
mine reclamation sites, as anti-skid agents for
icy roads, for the production of citrus fertilizer,
and as a waste-stabilization medium.
In 2001, we reused 176,000 tons of the ash
we produced, up from 143,500 tons the year
before. We also reused 86 percent of 47,800
tons of flue-gas desulfurization products,
which was up substantially from 45 percent
in 2000.
In 2002, we produced 137,105 tons of ash
materials and 21,621 tons of scrubber byproduct. For the first time, for all of 2002,
none of these materials were sent to a landfill. During 2003 we generated approximately
175,700 tons of ash materials and 28,800 tons
of scrubber byproduct, and for the second
consecutive year none of these wastes were
disposed of in landfills. Maintaining this
progressive trend requires continuous efforts
to find the lowest-cost, most environmentally
beneficial destinations for these materials.
It should be noted that year-to-year variability
in quantities of coal combustion byproducts
is related primarily to generating unit hours
of operation each year.
16
Reducing LLRW and ensuring
disposal options
Encouraging the right tree
in the right place
Nuclear utilities have been generating significantly less low-level radioactive waste (LLRW)
since the announcement of the closure of the
Barnwell, S.C., burial facility in 1994. Current
law requires that Barnwell stop accepting
waste from LLRW generators outside the
Atlantic Compact effective July 1, 2008, and
reduces annually the maximum volume
accepted. LLRW can include wastes such as
used equipment and parts, cleaning materials, and protective clothing, as well as resins
generated from demineralizers that remove
impurities from water used to cool reactors.
Exelon is working to ensure near- and longterm safe and cost-effective LLRW disposal.
We established a five-year contract with
Barnwell that provides disposal allocation
through June 30, 2008. We continue to reduce
LLRW volume by eliminating one-time-use
consumables, removing packaging material
before it enters the plant, and educating and
challenging the workforce. As a result, we
generate roughly 90 percent less LLRW than
in 1985. Exelon in 2003 generated 10 percent
less LLRW than in 2002. Additionally, we support legislation that will provide facilities and
options for safe, cost-effective LLRW disposal,
regulatory initiatives that provide LLRW
management flexibility, and interaction with
public- and private-sector groups.
Exelon maintains about 56,000 miles of overhead electric lines on its distribution system
and more than 6,000 miles of rights-of-way.
Our vegetation management program uses
safe, reliable, and cost-effective methods,
including tree trimming, tree removal, and
herbicide application. Methods are used
according to the standards set by the American
National Standards Institute (ANSI), the
Occupational Safety and Health Administration
(OSHA), and the International Society of
Arboriculture (ISA).
PECO maintains clearance over its 12,900
miles of lines on a five-year cycle. ComEd
maintains its 43,400 miles of lines on a
four-year cycle. Our rights-of-way – through
agricultural land, suburban and urban areas,
along highways and railroad corridors, prairies,
wetlands, and woods – are maintained on
a five-year cycle, with comprehensive surveys
of conditions every year.
We encourage customers to plant “the
right tree in the right place,” to help minimize contact with wires. PECO approaches
this through the Municipal Tree Restoration
Program (MTRP), and supports municipalities
by funding the removal and replacement of
weakened trees. ComEd’s programs have
been recognized with awards from the Illinois
Arborist Association and Tree Line USA.
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land
Exelon Notices of Violation (NOV) - Land*
[number of NOVs]
8
Exelon 2002
Exelon 2003
Working in partnerships
to restore prairie grass
Capturing carbon dioxide emissions
with tree plantings
Exelon has restored more than 100 acres of
natural prairie habitat on buffer lands and
rights-of-way in Illinois, since beginning our
initiative in 1994. This is helping to sequester
CO2, restore wildlife habitat, prevent runoff,
and improve water quality in surrounding
areas. In 2002 and 2003, restoration work
continued on three significant projects.
In Lake County, we restored three acres
along a transmission line adjacent to a county
bike path. In the Village of Buffalo Grove, we
organized a controlled prairie burn along
transmission right-of-way as part of a maintenance plan that we have coordinated with
a local grassroots stewardship group, the
U.S. Fish and Wildlife Service, the Illinois
Department of Natural Resources, and the
Army Corps of Engineers. And in Will County,
we restored eight acres along a transmission
right-of-way adjacent to a larger restoration
project being completed by the County Forest
Preserve District. Ten to 15 additional acres
of Exelon’s property have been targeted for
possible restoration during 2004.
Looking forward, we are continuing a partnership to assist The Nature Conservancy in
restoring hundreds of acres of prairie in the
Nachusa Grasslands of northwestern Illinois.
Approximately 150 acres were planted during
2002-2003.
During 2003, Exelon committed to participate
in PowerTree Carbon Company, LLC, a new
initiative sponsored by 25 U.S. power generators, organized to plant trees in critical habitats
in the Lower Mississippi River Valley. Member
companies have committed more than $3
million for up to six projects in Louisiana,
Mississippi, and Arkansas. These projects will
remove from the atmosphere and store more
than 2 million tons of carbon dioxide (CO2)
over their projected 100-year lifetimes. Exelon
will be entitled to claim approximately 3
percent of the sequestered CO2.
Benefits to the environment beyond carbon
sequestration will also be realized, including
restoration of habitat for birds and other
wildlife, reduction of fertilizer inputs to water
bodies, and increased stabilization of soil.
Several projects will involve the purchase of
land that will be donated to the U.S. Fish and
Wildlife Service. Other projects involve easements for tree planting on private land.
PowerTree Carbon Company is part of a
voluntary industry-wide effort to mitigate
greenhouse gas emissions in response to
the Bush Administration’s “Climate VISION”
plan. This initiative will also help advance
the knowledge base and science behind
carbon sequestration as a greenhouse gas
mitigation option.
2
*Land NOVs were added to Exelon’s corporate performance
metrics in 2002.
Measuring compliance –
Notices of Violation (NOVs)
Exelon is committed to operating in compliance with state and federal environmental laws
and regulations and its environmental permits.
NOVs are one of a number of environmental
performance metrics tracked and reported
to Exelon Management on a regular basis.
All NOVs are assessed and corrective action is
taken to prevent future incidents. “Land NOVs”
were added to Exelon’s corporate performance
metrics in 2002. More than half of the eight
land NOVs that occurred in 2002 were related
to underground storage tank (UST) management deficiencies. As a result of the increased
focus and attention, Exelon received only two
land NOVs in 2003, neither of which were related
to UST management issues.
17
18
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water
Water | Helping to restore a declining fish population
Exelon Generation operates fish lifts at its Conowingo Hydroelectric Station in a continuing effort to restore American
shad (Alosa sapidissima) and other migratory fish to the Susquehanna River. Conowingo’s East lift has operated since
1991; the West, since 1972. In 2003, the third largest number of American shad ever passed through the East Lift, allowing
them to continue their upriver migratory swim for spawning. An additional 9,802 were lifted at the West lift for tank
spawning, transportation to hatcheries, and biological study. The year-to-year variability in the number of shad passing
the dam is due primarily to environmental factors such as ocean conditions, river flow and water temperature during
the spring migration period. In addition to the lifts at Conowingo, fishways have now been completed at upriver dams
to assist in the effort to restore the shad and other migratory fish.
19
W
water
Water is a critical resource at Exelon, because of our
need for large volumes to cool our nuclear and fossil
plants and to generate electricity at our Conowingo
and Muddy Run hydroelectric facilities.
In 2003, Exelon developed a company-wide water
use inventory that will be used to establish a Water
Use Management Plan in 2004. The majority of the
more than 400 million gallons of water consumed
per day is used for power plant cooling, with the
remainder to support our other operations. Our daily
consumption is roughly equivalent to the municipal
water needs of 2.5 million people. Also during 2003,
we improved the operational efficiency at one of our
nuclear plants through an innovative, beneficial use
of water resources.
On the biodiversity front, we have been making
progress on several projects to restore native fish
species to rivers and tributaries in Illinois and
Pennsylvania. We have also decreased our National
Pollutant Discharge Elimination System (NPDES)
permit noncompliances through self-assessments
and enhanced tracking systems.
20
Augmenting the Schuylkill River
flow with mine water
Cooling water optimization team
develops impact reduction plans
In 2003, the Delaware River Basin Commission
(DRBC) approved an innovative demonstration
project by Exelon Generation to use mine-pool
water to augment the flow of the Schuylkill
River and increase the time that the Limerick
Generating Station may consume cooling
water from the river. Using more Schuylkill
River water allows us to divert less from the
Delaware River via the Point Pleasant
Pumping Station, and provides an environmental benefit to the Schuylkill by increasing
water flow during the summer months.
The project is running over two pumping
seasons. The first began in July 2003 and was
completed in October, resulting in net cost
savings (related to lower pumping costs),
even after accounting for project development.
A DRBC-approved operating and monitoring
plan was in place to govern the demonstration and verify that no environmental harm
was being caused. If the second pumping
season in 2004 succeeds as anticipated, we
plan to apply to the DRBC for permanent
approval of the use of the Wadesville Mine
pool, located in Schuylkill County, Pa., as a
water source. In addition, we will work to
identify additional mine-water sources, and
water treatment needs, for possible use in
meeting additional seasonal plant coolingwater demand.
In order to better anticipate and manage
summer cooling-water thermal demands,
Exelon’s Thermal Performance engineers
and environmental specialists from our midwestern nuclear plants and their corporate
counterparts established a Cooling Water
Optimization High Impact Team.
The team identified short- and long-term
options to optimize thermal performance
of our cooling-water bodies during extreme
heat conditions. Options include dredging,
cleaning condensers, priming/venting water
boxes, and adding or relocating remote temperature sensors. Based on studies of ultimate
heat sink temperatures, cooling-lake travel
times, lake temperature stratification, infrared
thermography, aquatic heat tolerance, and
lake and stream bathymetry, each site developed an Extreme Heat Implementation Plan
(EHIP) to guide cooling-water management
efforts in summer. The EHIPs include NPDES
discharge permit conditions, temperature
sensor locations, operating strategies, and
extreme heat contingency activities. Weather
conditions and weather forecasts are monitored to predict cooling-system temperature
conditions. Throughout the summer, coolingsystem performance is monitored on a
daily basis, and thermal modeling is used to
predict future cooling-system conditions.
Increasing the shad population in the
Susquehanna River
As the chart shows, the shad are returning in
higher numbers in recent years. The 2003 catch
and passage from both lifts brought to more than
1 million (1,095,298) the total number of shad
that have been transported upriver since 1972.
American Shad Resoration at Conowingo
204,514
Shad 2001
117,348
Shad 2002
Exceeding goals at the Quad Cities
fish hatchery
Notices of Violation and
NPDES Permit Noncompliances
With more than a quarter-million walleye fingerlings produced, 2003 was the fifth highest
production year ever for the hatchery project
at Exelon’s Quad Cities nuclear plant. This is
a unique project – the only private fish hatchery on the Mississippi River – initiated in 1984
to reduce the impact on the fish population
of the plant’s open-cycle cooling system, during
which water is withdrawn from, and returned
directly to, the river.
The abandoned spray canal at the plant
was converted for use as a hatchery, and the
plant’s cooling-water discharge stream is
used to maintain favorable aquatic conditions.
Southern Illinois University (SIU) operates the
hatchery under a research grant from Exelon
to optimize its fish-breeding potential.
Like raising plants, raising fingerlings is no
simple matter. It takes several months for the
fish to reach the proper size for release, and
the important factors are natural influences
often outside of human control, such as
weather and algae growth. The annual goal is
175,000 walleye fingerlings – enough to stock
the Mississippi, according to projections by
the Illinois and Iowa natural resource agencies.
The project has been a huge success, exceeding its annual target eight times since 1984,
and in three of the last four years.
NPDES Permit Noncompliances: The National
Pollutant Discharge Elimination System
(NPDES) permit program controls water
pollution by regulating point sources that
discharge pollutants into U.S. waters. NPDES
permits typically specify an acceptable level
of a pollutant in a discharge (for example, a
certain level of solids).
Exelon’s NPDES permit noncompliances
declined from 27 in 2001 to 24 in 2002 and
15 in 2003. The decline in noncompliance is
attributable to NPDES program self-assessments conducted at Exelon Generation’s
plants, and increased tracking of requirements and results by the facilities. The majority of permit noncompliances in 2003 were
caused by short-term equipment problems.
Notices of Violation (NOVs): Exelon received
two water-related NOVs during 2001, one
during 2002, and two during 2003. In 2002, a
subsidiary of Exelon received an administrative
order and notice of civil administrative penalty
assessment for an NPDES violation which
resulted in the loss of several thousand fish.
We are committed to operating in compliance
with environmental laws and regulations
and our environmental permits, so we track
and assess each NOV and take corrective
action to prevent future incidents.
134,937
Shad 2003
Walleye and Hybrid Striped Bass Fingerling
Production at Quad Cities Station
210,677
Walleye 2001
Striped Bass 2001
6,910
47,062
Walleye 2002
Striped Bass 2002
6,374
256,567
Walleye 2003
Striped Bass 2003
10,214
Exelon Permit Noncompliances - Water
[number of noncompliances]
27
Exelon 2001
24
Exelon 2002
15
Exelon 2003
Exelon Notices of Violation (NOV) - Water
[number of NOVs]
2
Exelon 2001
Exelon 2002
Exelon 2003
1
2
21
22
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safety
Safety |
PECO Energy recognized for employee safety performance
During 2002, PECO Energy accepted two prestigious awards for employee safety performance – the Governor’s Award
for Safety Excellence, presented by the Pennsylvania Department of Labor and Industry, and, for the second year in a
row, a Safety Achievement Award presented by the Energy Association of Pennsylvania, which represents Pennsylvania’s
electric and natural gas utilities. Nationwide, PECO’s safety performance ranks in the top tenth percentile of utilities.
Even so,“No One Gets Hurt” remains PECO’s safety vision and performance goal. Between 2002 and 2003, PECO Energy
has reduced the number of lost workday incidents (employee injuries that result in lost workdays) by 33 percent and
reduced total recordable injuries and illnesses by 20 percent.
23
S
safety
Despite our emphasis on employee and public safety,
there were three worker fatalities during 2002. Our
responses to these tragedies led to learning experiences that are shared across the company. We are
pleased that no worker fatalities occurred in 2003.
We are working to continually improve our safety
performance. Our only goal is a perfect record – “No
One Gets Hurt.” That means we set goals and measure
our performance, and that, in the event of an incident,
we take immediate and appropriate action to heighten
safety awareness and prevent further occurrences.
We are serious about training our employees and
are open in sharing our experience, expertise, and
facilities with other industries and our communities.
Exelon Safety Performance
[OSHA Recordable Incidence Rate - incidents per 100 employees]
3.59
Exelon 2001
2.72
Exelon 2002
Exelon 2003
1.76
Edison Electric Institute
2.41 2002 1st Quartile
24
Measurable improvement in OSHA
Recordable Incident Rate
Each Exelon business unit has implemented
initiatives to improve the safety of the workplace and eliminate injuries and illnesses. The
success of these efforts is reflected in a reduction in our Occupational Safety and Health
Administration (OSHA) Recordable Incidence
Rate – the number, per 100 employees, of workrelated injuries and illnesses that require
more than first-aid treatment. As shown in
the adjacent graph, Exelon’s OSHA Recordable
Incidence Rate fell from 3.59 in 2001 to 1.76 in
2003, a 51 percent improvement.
Exelon Services continued its trend of
improved safety performance in 2003, achieving all-time-low incident and lost-time rates.
Exelon Nuclear maintained 2002-2003 injury
and illness rates at or below industry average.
Exelon Nuclear management is now implementing a program based on the fundamentals of safety performance. We anticipate that
this program, along with other strategies, will
help drive continuous safety improvement.
Safety performance in Exelon Power began to
decline in 2003, but management was alert
to it and began corrective actions in the third
quarter of 2003. By revising safety programs
and implementing enhanced observation
programs, Exelon Power began to improve
safety behaviors and restore its performance
to first-quartile levels.
Taking action to work safer
Exelon Energy Delivery (EED) companies
ComEd and PECO Energy have reduced workrelated injuries and illnesses while increasing
their efforts to integrate and standardize
their safety programs and expectations.
Programs designed to actively involve each
employee in injury and illness prevention
are adding to the success.
During 2003, more than 800 EED employees
and managers were trained in methods
to promote safety under the Behavioral
Accident Prevention Process (BAPP) and the
“Sponsorship to Action” program. BAPP
involves employees in coaching one another
to perform safely. In the process, safe work
practices and behaviors are identified, communicated, and then measured. The result is
more employees working safely. Employees in
EED understand their responsibility for safety,
yet translating responsibility to action is sometimes difficult. The “Sponsorship to Action”
program is an innovative approach that helps
supervisors and managers promote workplace
safety by describing key steps they can take.
EED also maximizes employee involvement
in safety management through safety
committees, councils, and corrective-action
teams. Hundreds of committees and councils
are held each year to communicate safety
issues and best practices, and to correct
programmatic deficiencies.
Providing training in fire safety
Sharing training to save lives
In 2002 and 2003, Exelon continued the
practice of fire-safety training at the PECO
Fire Academy, making PECO Energy’s operations, Exelon Power’s mid-Atlantic generating
stations, and the five-county Philadelphia
region safer places.
At the Academy, PECO trains and certifies
employees in firefighting, emergency first
aid, and CPR. In firefighting, the Academy
uses a computer-controlled, natural-gas-fired
simulator to teach “technique-based” firefighting. The simulator maintains the fire until
the firefighters apply the proper techniques.
Training in first aid and CPR is offered to
Exelon employees at offices and facilities
throughout the region. It is training that
has great value in their workplaces – and
in their own families and organizations.
In support of community safety, the
Academy offers its full range of courses to
area fire companies and emergency response
teams. In fact, nearly every fire company in
the Philadelphia region has trained at the
Academy, and most return regularly to maintain certifications.
The National Association for Search and
Rescue, Inc. (NASAR) states that more than
60 percent of the fatalities in confined-space
operations are “rescuers.” That means training
and regular drills are extremely important.
The team at Exelon Power’s Eddystone generating station drills constantly, and can handle
anything from fire suppression, to emergency
medical services, to dealing with hazardous
materials releases. Confined-space rescue drills,
held on the Eddystone plant site, now include
members of the Collingdale Fire Company –
who often partner with Eddystone employees
at the “rescue scene.”
Collingdale Fire Company is the only fire
company in Delaware County, Pa., certified to
perform confined-space rescues. Participating
in drills with Exelon Power’s Eddystone
Generating Station’s Plant Protection Group,
such as occurred in 2003, is the reason.
As the general manager of Eddystone
Station puts it, “We’re pleased to have the
ability to share the vast experience and
knowledge of our Plant Protection Group
with the local community. If the training
helps save one life, it is worth every minute.”
Ensuring life-saving communication
for river rescues
The safest and most effective way for teams
to communicate while working on a river
rescue is by handheld radios – all on the same
frequency. But when the teams are responding from different communities, that’s not
often the case. In 2003, Exelon Power made it
a reality for the three rescue organizations
that respond to emergency rescues up and
downstream from the Black Rock Dam, owned
by our Cromby Generating Station, on the
Schuylkill River.
The Cromby Station donated $20,000 to
the Mont Clare Fire Department in Phoenixville,
Pa., to purchase a communications system
that will be shared with Spring-Ford Rescue
and Friendship Dive. These three volunteer
organizations will now be able to coordinate
more easily. The chief of the Mont Clare Fire
Department noted, “During emergency
responses along the river, we sometimes have
numerous boats searching, from different
companies. This new equipment will help tie
all of the emergency personnel together to
ensure we can perform quickly and safely
during rescue situations.”
25
26
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community
Community | Partnering to protect and promote biodiversity
During 2003, Exelon established a substantial partnership with The Nature Conservancy (TNC) to fund the protection
and promotion of biodiversity in Illinois and Pennsylvania. Specifically, TNC will use Exelon’s contribution to support
the Emiquon Project in Illinois and the West Branch Wilderness Project in Pennsylvania. At Emiquon, Exelon’s funding
will help restore a portion of the 7,775 acres of floodplain and bluffs along the Illinois River that was purchased by TNC
in 2000. For the West Branch Wilderness, TNC will acquire 3,000 acres of forest in North Central Pennsylvania with
Exelon’s funding. Two Exceptional Value freshwater streams cross or originate on that land, and ultimately provide
freshwater to the Susquehanna River, a significant contributor to the Chesapeake Bay watershed. Our partnership
with TNC will also provide multiple volunteer and educational opportunities to company employees across the PECO
Energy and ComEd service territories.
27
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community
Exelon’s corporate citizenship strategy is designed to
Funding education programs
Focusing on the environment
improve the quality of life for the people who live
Exelon and our employees support programs
for children and adults that encourage
students to stay in school, promote math
and science, improve workforce skills, and
encourage personal development.
Each year, the “ComEd 100” program honors
students in the 7th through 12th grades who
proficiently apply scientific principles in their
scholastic endeavors. Students apply for the
award and may nominate a parent, mentor
or educator who worked with them for an
Illuminators Award. Also, in our partnership
with the Chicago Park District to promote
environmental and energy awareness, we
endow the Exelon Fellow, a Chicago Public
School teacher who helps connect the parks,
the curriculum, and the schools.
PECO has long supported the Philadelphia
Academies, a non-profit organization dedicated to strengthening the skills of the city’s
public school students. ComEd supports the
Black Star Project motivation program for
Chicago students interested in math, science
or engineering careers. ComEd has also established a partnership with the Young Women’s
Leadership Charter School, which focuses on
math and science.
Across the company, our program to match
employees’ contributions to accredited schools
(up to $1,000 per calendar year) provided
more than $240,000 in gifts last year.
With a mission to improve the quality of
the environment, Exelon supports programs
that promote environmental education,
conservation, and preservation, as well as
programs that directly help develop cleaner
sources of energy, protect endangered
species, and beautify neighborhoods. Here
are some examples:
We were the presenting sponsor of the
Chicago exhibition in 2002 of Earth from Above,
120 breathtaking prints of the planet’s surface
by the world-renowned aerial photographer
Yann Arthus-Bertrand. A powerful environmental educational tool, the exhibit awed
and delighted more than 1.5 million visitors.
We are a long-term supporter of the
Schuylkill Center for Environmental
Education, a Philadelphia-area project that
provides habitat for wildlife as well as wildlife
and conservation education programs for
students and the community. PECO was the
lead corporate partner in the Center’s recent
Discovery Center project to expand its
educational facilities.
and work in our service territories, while enhancing
our reputation as a corporate citizen. We understand
that corporate giving can simultaneously serve
the community and increase business value. Our
strategy is linked to our Vision and Strategic Goal
of “Living up to our commitments.”
We believe that our commitment to the communities in which we do business, as well as to our
customers, shareholders, and employees, are hallmarks
of the company. For that reason, we target our
contributions, sponsorships, memberships, employee
volunteerism, executive involvement, and in-kind
donations on four key areas: education, environment,
arts and culture, and community and neighborhood
development. And we do this all while reinforcing
our core values of diversity and safety.
28
Contributing to arts and culture
By supporting the arts in our communities,
we make experiences available that not only
enrich the lives of individuals, but also enrich
the communities by helping to attract new
businesses, retain a talented work force, and
promote tourism. Our support of both worldrenowned groups and local artists and organizations with world-class talent aims to make
valuable programs available and accessible to
an ever-growing and more diverse audience.
For example, the “PECO Power Hour”
supports the Philadelphia Orchestra’s rush
ticket program, making 100 tickets available
at each concert for just $10 each. Exelon and
ComEd are major sponsors of the Joffrey
Ballet of Chicago.
We sponsored a major exhibition in 2002
at the Field Museum in Chicago, Cleopatra of
Egypt: from History to Myth, which included
more than 350 objects on loan from the British
Museum and museums in Alexandria, Cairo,
Rome, the Vatican, and more.
In 2003, PECO sponsored the Marian
Anderson Awards in Philadelphia, which
honored Oprah Winfrey for her artistic and
humanitarian accomplishments. Chairman
John Rowe participated in the tribute event,
which raised funds for scholarships and
career development for young artists.
Enhancing community
and neighborhood development
Reflecting the diversity of the
communities we serve
By helping diverse communities in our service
area to develop and thrive, Exelon benefits
as well. We are able to attract and maintain
a rich and varied workforce that brings us
innovation and dedication, and helps us
anticipate the needs of our customers. Each
year, we offer support to a wide range of
organizations and programs.
In 2003, our executives led fundraising
efforts in Chicago for the Spanish Coalition for
Jobs, to enhance job training and education
programs for Latino youth and young adults.
PECO’s support of the Greater Philadelphia
Urban Affairs Coalition helps build the capacity of grassroots organizations to provide
educational and economic opportunities in
disadvantaged communities. ComEd, for several
years, has sponsored the Anti-Defamation
League’s Unity Through Diversity Conference,
which gathers more than 1,000 Chicago high
school students, who discuss ways to combat
prejudice, bigotry, and discrimination, and
return to their schools and neighborhoods
with hands-on ideas to promote tolerance
and respect.
Exelon Corporation is among the leading
supporters of United Way. The company’s
corporate gift was $2 million in 2003. In addition to the corporate gift, Exelon employees
raised almost $3 million for United Way.
Exelon’s vision for diversity is to be recognized
as one of the most admired companies
because of the passion for diversity and
inclusiveness we demonstrate in all our business relationships. Assisted by our Corporate
Diversity Office and Diversity Council, we have
been implementing strategies that focus on
diversity in our workforce, among our suppliers, in our civic and social commitments,
and in the area of education and support.
Examples of diversity initiatives include:
linking compensation of key managers
and executives to diversity goals; providing
domestic partnership benefits to all employees;
ensuring strong support for Employee Network
Groups – voluntary groups representing
minority communities; and diversity education and training programs.
Recent awards and recognition of the
company and CEO John Rowe reveal our
success. The 2002 Citizen of the Year award
from the City Club of Chicago cited Exelon
as one of Chicago’s most philanthropic
and civically active corporations. El Valor
Corporation’s 2003 Corporate Visionary
Award is for a corporate leader who opens
doors of opportunity for all people. Profiles in
Diversity Journal, September 2003, featured
John Rowe as one of corporate America’s ten
most powerful diversity champions.
29
30
Building more diverse supplier
relationships
Funding sustainable energy
development in Pennsylvania
Raising more than $300,000
for charity in two golf events
We believe that we will build a competitive
advantage from the energy and value that
diverse employees and suppliers will bring us.
Supporting a diverse supplier base keeps us
connected to our customers and helps us
meet our social responsibility to give back
to the communities from which we draw our
income. Further, we need creative thought
and ideas to help us drive costs out of the
supply chain, and employees and suppliers
with different backgrounds, experiences, and
perspectives are enormously helpful.
We are committed to supporting supplier
diversity now and in the future. Our goal is to
help Minority and Women-Owned Businesses
(MWBEs) develop and grow to create opportunities for interaction between major
contractors and MWBEs, with a focus on
sponsorship and mentoring relationships.
We also understand the challenges that
emerging MWBEs face in supplying our company
across our different geographic regions and in
meeting challenging engineering requirements.
To help ensure participation by MWBEs, we
are helping many of our primary suppliers
to secure diverse “second-tier” suppliers as a
means to achieve our diversity goals. During
2003, more than 7 percent of Exelon’s supplier
expenditures went to MWBE companies.
As part of PECO Energy’s electric utility
restructuring proceeding before the
Pennsylvania Public Utilities Commission,
a sustainable development fund (SDF) was
created in 1998 to support a more sustainable
energy future in the state. Additional money
was contributed to the fund in 2000, with the
merger of PECO and Unicom to form Exelon.
The fund is administered by The Reinvestment
Fund (www.trfund.com), based in Philadelphia.
In 2002 and 2003, the SDF has helped
finance four Pennsylvania wind energy
projects totaling 159.5 MW, with wind power
production incentive agreements totaling
$10 million. A solar photovoltaic (PV) grant
program has approved 52 system applications
for a total of 195.8 kW. So far, 33 systems have
been installed, for 120.5 kW. Other initiatives
supported by the SDF include co-marketing
an energy performance contract-financing
product through energy service companies
that assist customers in becoming more
energy-efficient, and investing in lightingcontrol and fuel-cell technologies.
Annual golf events sponsored by Exelon
Generation at Hartefield National Golf
Course in Avondale, Pa., just south of Exelon
Generation’s headquarters in Kennett Square,
delivered big checks to worthwhile national
and local causes in 2003.
The third annual Exelon Generation Charity
Golf Tournament benefited the ALS Hope
Foundation, a not-for-profit public charity
that provides hope and support to those
impacted by Amyotrophic Lateral Sclerosis (ALS),
commonly known as Lou Gehrig’s disease.
Players and volunteers raised $201,000
through corporate hole sponsorships, individual hole sponsorships, individual contributions,
a silent auction, and a raffle.
The fifth annual Exelon Invitational Golf
Tournament, hosted by Exelon-sponsored golfer
Jim Furyk, has seen many of the big names
from the Professional Golf Association (PGA)
each year, and draws a good crowd – more than
8,500 in 2003. The tournament is preceded by
one of the PGA season’s most exclusive entertainment and networking events, the Gala on
the Green. A centerpiece of the Gala is a live
and silent auction for the benefit of the Boys
and Girls Clubs of Philadelphia and Harrisburg,
which helped raise more than $100,000.
Supporting two Chicago charities
with one golf outing
Providing insight through
youth internships
Teaching and learning about
the workday world
Two Chicago charities were the big winners
at Exelon Generation’s 2003 Charity Golf
Outing at Harborside International Golf Club
in Chicago. The Association for Individual
Development and The Big Shoulders Fund will
share more than $315,000 raised from corporate
and individual hole sponsorships, individual
contributions, an auction, and a raffle.
The Association for Individual Development
is a private, not-for-profit organization for
children and adults with disabilities and
mental health problems. The Association
annually helps more than 2,000 people
become more independent by providing
education, training, therapy, counseling,
and other support in a range of vocational,
therapeutic, and community living settings.
The Big Shoulders Fund was established by
former ComEd chairman James O’Connor to
provide operating support and scholarships
to 121 Catholic elementary and high schools
in inner-city Chicago. Approximately 40,000
students attend these schools, with about
two-thirds from families with incomes below
the poverty level.
In 2001, 2002, and 2003, six inner-city high
school students got a six-week taste of
the business world through an internship
program with Exelon’s Power Team. The
students, from the Granville Academy in
Trenton, N.J., each paired up with Power
Team mentors to accumulate real understanding and experience in a different facet
of Power Team’s day-to-day operations.
At the end of their internships, each
student gave a presentation on what they
had seen and learned, impressing parents,
family members, Power Team employees, and
Granville Academy officials with their very
real understanding of sophisticated business
practices. Presentations covered such topics
as the ins and outs of building long-term
power contracts, the relationship between
transmission, generation, and load, and
the demands of information technology
management at a complex operation such
as Power Team.
Granville Academy was founded by the
Rev. William Granville, Jr., who rose from a
disadvantaged youth in inner-city Trenton to
become a successful Mobil Oil Company executive. Now a chain of 12 schools on the East
Coast, the Academy works to develop internship opportunities with top-tier companies.
Each year, Exelon Generation hosts a Take Your
Child to Work Day event. In 2003, they took
the work part seriously. Instead of listening to
speeches and pocketing giveaways, more than
65 children of Exelon employees at the Kennett
Square headquarters spent the day getting
hands-on experience in marketing, career
development, meteorology, law, and finance.
Two age groups participated in teambuilding exercises. The younger group had to
develop a product idea or a company name,
decide what the product would be called, and
design and produce T-shirts featuring the
name and logo. The older group learned how
to prepare a résumé and act appropriately in
an interview, role-played issues of work-life
balance, or interviewed Power Team employees
about their careers. All the children toured
the Power Team trading floor to get a better
idea of how their parents’ jobs connect to
the power marketing function. As one tour
leader explained, “If their parents work with
the generating stations, you say ‘We find
companies who want to buy electricity from
the station,’ and the kids get it.”
31
32
Promoting cleaner transportation
Supporting the World Series of Birding
In 2003, its tenth year of supporting
improved local air quality by promoting
cleaner transportation, PECO Energy has
assumed chairmanship of the Clean Cities
Program. Sponsored nationally by the
Department of Energy (DOE), this program
exists to promote deployment of light-duty
alternative fuel vehicles pursuant to the 1992
federal Energy Policy Act (EPACT) purchase
requirements for commercial vehicle fleets.
The program made significant progress in
2003 by securing grant funds to implement
a program at the Philadelphia International
Airport. The airport is now developing a
long-term ground transportation strategy
to use natural-gas transit buses on the
passenger side. On the flight side, the airport
will be evaluating electric support equipment,
such as ground-power units, service trucks,
pushback tractors, and baggage handlers. Clean
Cities also secured grants to assist Lower
Merion School District, the Abington Art Center,
Bryn Mawr College, and Schwan’s Foods.
The “World Series of Birding” is an annual
event in New Jersey, sponsored by the New
Jersey Audubon Society. It attracts teams of
birders from all over the world, who raise
money for their favorite conservation causes
while they also raise awareness of our precious
habitats and the needs of migrating birds.
In 2003, Exelon sponsored two teams in the
20th Anniversary World Series of Birding –
Amergen Oyster Creek’s Oyster Crackers and
the Birding Club of Delaware County’s Exelon
Cape Island Coyotes. Our sponsorship supports
the event itself, while the teams solicit
pledges for the conservation cause of their
choice. Pledges are calculated “by the bird,”
based on the team’s final count.
The Oyster Creek team was comprised of
employees who did their birding on company
property to demonstrate that we not only
support, but also provide habitat for, birds.
The Exelon Cape Island Coyotes team
used its pledges to support an education
grant fund that promotes the study of the
environment and conservation.
Promoting small-source emission
reductions
In recent years, regulatory programs have
dramatically reduced emissions from industry.
Now, small sources represent a larger percentage of local emissions that must be reduced
if ozone nonattainment areas are to meet
air-quality standards.
One voluntary community initiative to
educate the public about actions they can
take to help reduce emissions is the “Clean
Mower Rebate Program” (CMRP) that Exelon
Power has sponsored with the Pennsylvania
Resources Council (PRC) and Pennsylvania
Department of Environmental Protection
(PADEP) since 1998. We received a 2002
Pennsylvania Governor’s Award for
Environmental Excellence for sponsoring
this program.
Under the CMRP, PECO Energy service area
residents register with the PRC to retire
gasoline lawn equipment at one of several
springtime event locations, in exchange for a
rebate towards the purchase of a new electric
model. More than 1,000 gasoline lawnmowers
and 100 string trimmers have been retired
since 1998, including 286 mowers in 20022003. Mowers replaced under the CMRP are
estimated to net a one-ton-per-day reduction
of hydrocarbons, carbon monoxide, particulate matter and NOx.
C
community
Watching falcons return to nest at
Three Mile Island
Building more ladders for shad
on the Schuylkill River
For a pair of nesting Peregrine falcons, there’s
no place like dome – the domed containment
building at Three Mile Island, where the
pair and their chicks reside. In 2003, the pair
produced offspring for the second consecutive
year, thrilling state ornithologists who initially
thought the pair would move their nest
before producing chicks. Three Mile Island,
which is in the Susquehanna River, is an
excellent location for the falcons, because the
river is a flyway for many migrating birds –
providing excellent hunting to feed the falcons
and their young.
Peregrine falcons are an endangered
species in Pennsylvania. There are only about
a dozen known nesting pairs in the state. In
the early part of the 20th century, Pennsylvania
boasted some 350 nesting pairs, but the birds
were decimated by the use of pesticides –
particularly DDT. No nests were reported in
the state from the end of the 1950s to 1987,
but as evidenced at TMI, reintroduction
efforts over the past 15 years are having an
effect at last.
The Pennsylvania Department of Environmental
Protection (PADEP) has targeted the Schuylkill
River as a river system where the restoration
of a self-sustaining population of migratory
fish, particularly the American shad, may
be feasible. To help restore the American shad
population, Exelon Generation is building
fishways at the Schuylkill’s Norristown and
Black Rock dams. Prior to reaching the
Norristown and Black Rock Dams, shad
must pass three downriver dams not owned
by Exelon.
PADEP has approved Exelon Generation’s
request to utilize a type of fishway that can
accommodate large numbers of American
shad and river herrings. It will be many years
before the estimated 25,000 American shad
per-day capacity of this ladder is exceeded.
In fact, the ladder will fully accommodate
the low end of the range of the goal set
for a fully restored population – an annual
run of American shad in the range of 250,000
to 750,000.
For more information on American shad,
visit the Pennsylvania Fish & Boat Commission
website: www.fish.state.pa.us/
33
34
E
economics
Economics | Trading drives increased coordination of functions
What do the environmental folks at Exelon Power have to do with the electricity traders on the Power Team Trade
Floor? More all the time. In recent years, federal and state environmental regulations have been implemented to
reduce sulfur dioxide (SO2) and nitrogen oxide (NOx) emissions from the utility sector. Instead of dictating the exact
actions that affected electric generators must take to comply, these regulatory programs allow electric utilities to buy
and sell emission allowances to meet their compliance obligations. This regulatory shift, combined with the deregulation of energy markets in Pennsylvania and Illinois, has necessitated a greater integration of thinking across the
environmental and trading functional areas within Exelon Generation to determine the most cost-efficient combination
of actions – installing technology and emission allowance trading – for Exelon to meet its compliance obligations.
35
E
economics
As noted in the financial data provided earlier in
this report, 2003 was a challenging but financially
rewarding year for Exelon. Our share price closed
2003 at $66.36, up from the previous two years.
Some of Exelon’s environmental actions in both the
product and service areas helped create economic
benefits for the company, shareholders, and our
communities in 2002 and 2003.
On the product side, Power Team participated
actively in the renewable energy credit (REC) market.
PECO Energy gained regulatory approval to offer a
retail wind product in southeastern Pennsylvania
starting in 2004. ComEd continued its wholesale
renewable energy certificate program and expanded
its REC portfolio by agreeing to buy the output from
the Crescent Ridge Wind Project in Illinois. In total,
Exelon had agreements to purchase electricity
and/or RECs from more than 350 MW of renewables
during 2003.
On the services side, Exelon Energy Delivery continued to work with customers on energy efficiency and
peak energy demand reduction projects.
36
Adding wind to ComEd’s renewable
energy portfolio
Continuing to promote renewable
energy markets
ComEd’s renewable energy portfolio has been
based on solar energy and generation fueled
by landfill gas. During 2004, we expect to add
wind to the mix.
ComEd purchases power generated from
landfill gas at two sites in Chicago and at 19
sites across Northern Illinois. This process
converts the byproduct of the decomposition
of landfill waste – methane – into a valuable
energy resource.
Over the past three years, our solar portfolio
has grown to represent almost 90 percent
of the photovoltaic (PV) capacity in the state,
helping Illinois rank fifth among states in
installed solar PV capacity, according to
National Renewable Energy Laboratory (NREL)
statistics. We have helped install more than
900 kW of solar arrays on many Chicago buildings, including schools, museums, and on our
company facilities – with more on the way.
In our latest initiative, we are helping Illinois
Wind Energy and Tomen Power Corporation
develop their Crescent Ridge wind energy
project, one of the first commercial scale
wind farms in Illinois, which will be located
about 110 miles west of Chicago in Bureau
County. We have agreed to purchase the
entire output of the 51 MW facility – enough
renewable energy to power approximately
20,000 homes.
ComEd continued to support renewable
energy over the past two years through its
wholesale renewable energy certificate
program. The program was developed in
2000 under a marketing agreement with
the Environmental Resources Trust. The
program expanded in 2003 to include
Community Energy Inc., a leading marketer
of wind certificates.
The City of St. Charles recently became
the first municipal utility in Illinois to offer
a green power program to its customers.
ComEd will be supplying St. Charles with
renewable energy certificates, including wind
certificates from the Crescent Ridge wind
project. Community Energy will assist St.
Charles in marketing the program.
Selling wind energy in Pennsylvania
In 2001, the Pennsylvania Public Utility
Commission (PUC) approved a Wind Energy
Service Rider for PECO Energy. A competitor
appealed the approval, however, delaying
implementation of a program. In the third
quarter of 2003, PECO won the appeal and
began preparing an offering for 2004. PECO
currently anticipates that it will begin selling
Pennsylvania New Wind Energy to large
customers in early 2004, and to all customers
in mid-2004.
PECO Energy is partnering with
Community Energy of Wayne, Pa., to offer
Pennsylvania New Wind Energy to its retail
customers. Pennsylvania New Wind Energy is
available to all PECO customers who are not
being served by another electric generation
supplier. Customers may elect to purchase
wind energy either for their entire electric
load or in increments of 100 kilowatt-hour
blocks up to 100 percent of their total load.
All wind energy sold under this offering will
be generated by wind farms in Pennsylvania.
Our Wind Generation Portfolio
Project Name
Installed MW
Waymart
63
Mountaineer
Average Annual
Capacity Factor
Commercial
Operation Date
Owner*
Location
32%
FPL Energy
Near
Scranton, PA
October 2003
66
32%
FPL Energy
Near
Thomas, WV
December 2002
Mill Run
15
29%
FPL Energy
Near
Pittsburgh, PA
December 2001
Somerset
9
30%
FPL Energy
In
Somerset, PA
December 2001
*FPL Energy purchased all of the projects from project developers.
Exelon Generation has long-term power purchase agreements (PPAs) in place with four wind generation projects, for a total wind capacity of 153 MW. The original rationale for our wind PPAs was that the
primary demand would be for Renewable Energy Credits (RECs) associated with the products, and that
sales would be through competitive retail suppliers and, with the approval of a wind block rider, through
PECO. We also expected increased demand due to New Jersey’s renewable portfolio standards law.
As the market has developed over time, however, retail choice has not been a growing market. Instead,
we discovered a natural demand for wind energy, chiefly among large institutions such as universities
and government agencies. The primary challenge for the portfolio is trying to sell our wind RECs on a
longer-term basis that reduces the exposure of our supply contracts. A secondary challenge is creating
new products to find new demand.
37
Making load reduction a win-win
proposition
Business customers of ComEd and PECO
Energy can participate in programs that
promote energy efficiency, environmental
quality, business savings, and reliability. In
peak demand times, electricity providers need
the assistance of customers to help reduce
load, ensuring the stability of the energy
supply. Such programs are mutually beneficial
solutions. They provide a financial incentive
to the customer to curtail use, while providing
benefits to the community and the environment through a lower, more stable load.
Exelon’s Smart Returns programs provide
participating customers with financial incentives to reduce electricity use upon request
during times of high wholesale prices or
demand. The more the customers curtail,
the more energy they save, and the more
financial incentive they can potentially earn.
38
ComEd’s Smart Returns Program
2. Active Load Management (ALM): A mandatory
ComEd’s load response programs combine to
create one of the largest, most successful load
response portfolios in the United States. To
operate these programs, ComEd works closely
with its large commercial, institutional, and
industrial customers to customize curtailment plans and maximize energy-efficiency
opportunities. ComEd’s Load Response
programs can contribute a 900 MW reduction
to system peak loads on a hot summer day.
program in which customers who choose to
participate guarantee that they will reduce
their energy consumption within one hour
of PECO’s request. This is an emergency
program, designed to respond to events that
are triggered within the PJM power pool. PECO
gained 58 MW of new ALM customer load
under this program during 2003, in addition
to the existing 50 MW under contract.
PECO’s Smart Returns Program
First implemented in 2001, it has three specific products, and customers may participate
in any or all.
1. High Value: A voluntary program for PECO
customers who are willing to respond to
energy demand situations occurring outside
of the regional Pennsylvania-New JerseyMaryland (PJM) power pool. Examples of
situations include plant outages, abnormal
weather, or emergency conditions. PECO has
been aggressively pursuing customers for
High Value since 2001, resulting in 164 MW
under this program for 2003.
3. Voluntary Load Reduction (VLR): A voluntary
program in which customers receive a onehour notification to curtail energy consumption and customers share in a percentage of
PECO’s energy cost savings. PECO had 126.5
MW under this program for 2003.
In total, PECO’s load response program
accounts for nearly 400 MW of reduction.
E
economics
Saving energy, avoiding emissions,
improving economics in Chicago
Boosting Philadelphia’s economy
and PECO revenue
Through a number of initiatives with the
Chicago Department of Environment (DOE),
ComEd is demonstrating its commitment
to help business, government, and nonprofit
organizations identify opportunities for
improved energy-efficiency and pollutionprevention.
Through the Chicago Industrial Rebuild
Program in 2002, for example, we analyzed the
area’s chemical processing industry. At 16 sites,
assessments identified 187 savings opportunities. These opportunities would result in yearly
savings of 9.8 million kWh, 418 billion BTU, and
12 million cubic feet of water, as well as avoidance of 23 million pounds of carbon dioxide
air emissions. In 2003, we began analysis of
the area’s confectionery industry, which
promises significant opportunities as well.
The Corridor Initiative is helping facilities
in Chicago’s industrial corridor identify and
implement energy-efficiency and pollutionprevention opportunities. Also, ComEd
assisted Chicago in meeting energy efficiency
goals for the city’s own facilities. Partnering
with Chicago’s Department of Environment,
ComEd managed projects toward the city’s
goal to retrofit 15 million square feet of government buildings. By year-end 2003, dozens
of facilities were contributing savings.
The Economic and Business Development
team at PECO, working with the Greater
Philadelphia Chamber of Commerce, has been
helping to market the region to businesses
throughout the country. Their success can be
measured in dollars, jobs, and awards.
In some recent examples, the team helped
persuade Siemens Medical Solutions to move
its American sales and service headquarters
to the region, bringing with it 3,000 jobs and
$75 million in capital investment. When
GlaxoSmithKline (GSK) needed to expand its
pharmaceutical research and development
operations, the team helped facilitate a deal
in which GSK is expanding its operations into
a $40 million, 200,000-square-foot building
for 800 workers.
The result of such activity is not only
revenue for PECO from the new business, but
also good will for the company. It’s no wonder
that Site Selection magazine honored PECO
as its 2003 Utility of the Year for Economic
Development, stating, “PECO’s record is even
more impressive when one considers that the
utility has won this honor despite a sluggish
national economy, the increasing pressure of
utility deregulation and mounting competition
from regions eager to recruit companies out
of the Northeast.”
The Philadelphia region now has a website dedicated to promoting the facts and
figures about why business should be in
Greater Philadelphia:
www.SelectGreaterPhiladelphia.com
39
Exelon Corporate Policy: Environment
Policy Statement
Implementation
Exelon is committed to constantly improving its environmental performance. We will strive for leadership in environmental management
and will partner with the communities we serve, to preserve, restore
and enhance the environment. We will promote a corporate culture
where full compliance with environmental regulations is the minimum
level of acceptable performance and where business initiatives are
consistent with environmental responsibility.
This policy shall be implemented by establishing and maintaining:
Policy Intent
Exelon shall:
– An independent Compliance Audit Program and an independent
EMS Conformance Audit Program.
– Comply with all applicable environmental laws, regulations, and
commitments, with the objective of moving beyond compliance.
– Support for the development of low impact energy resources and
energy efficiency.
– Take a risk management approach to the management of environmental impacts of our operations – first, prevent pollution, where
possible, then reduce environmental impacts, and implement
cost-effective mitigation measures for environmental impacts that
cannot be avoided.
– Training programs for employees and contractors to educate them
about their environmental responsibilities.
– Utilize natural resources more efficiently.
– Consider environmental issues when planning process changes,
infrastructure design modifications, and other business decisions.
– Consider stakeholder environmental expectations in decision-making.
– Measure and publicly communicate the progress being made
towards improving environmental performance.
40
– A corporate-wide Environmental Management System consistent
with the International Organization for Standardization (ISO) 14001
Environmental Management System (EMS) specification.
– The Exelon Environmental Council.
– Annual objectives and targets for measuring and improving environmental performance.
– Support for environmental public policy based on sound science
and economic analysis.
Exelon Corporate Policy: Safety
Policy Statement
Implementation
Exelon shall manage its business to promote the safety of its employees,
customers and the general public from hazards associated with the
services it provides.
This policy shall be implemented by establishing and maintaining
safety procedures and standards for each Business Unit and Corporate
Department which contain the following features:
Policy Intent
– Education programs that develop safety awareness among employees,
customers, and the general public.
Exelon shall:
– Acknowledge that management has the responsibility for ensuring
a safe work environment and establishing programs that promote
safety for employees, customers, and the general public.
– Communicate the expectation that employees have the primary
responsibility for safety through their behaviors on the job. Unsafe
work behaviors shall not be tolerated.
– Proactively minimize hazard exposure to employees, customers and
the general public through the use of a systematic approach which
includes awareness, risk assessment, mitigation and continuous
improvement.
– Proactively support research and apply methods designed to improve
the safety of work practices, procedures and technology.
– Risk assessment and mitigation to eliminate, isolate, or reduce the
hazard exposure to employees, customers and the general public.
– Work practices, personal protective equipment standards and
training programs for employees to perform their duties safely
when the conscious decision is to approach the hazard.
– Systems to investigate accidents and near misses for the purpose
of continuous improvement.
– A Risk Management Council that analyzes the frequency and causes
of public liability incidents and initiates and conducts periodic cost
benefit reviews of loss control programs.
– An Executive Safety Council that provides sponsorship for and
monitors the safety program.
41
Appendix A: Exelon Owned Net Electric Generating Capacity by Major Station 1,7
Fossil
Plant Capacity
[MW]2
2001 MWh3
GEN ERATION
2002 MWh3 2003 MWh3
EMISSIONS [TONS]
2002
2003
Conemaugh [New Florence, PA]
2 coal units (baseload), SO2 scrubbed. Data reflects Exelon
Generation’s 20.72% plant ownership.
352
2,638,656
2,622,261
2,795,752
SO2
NOx
CO2
1,343
4,323
2,513,200
1,230
4,032
2,404,168
1,528
4,456
2,666,915
Cromby [Phoenixville, PA]
1 coal unit (baseload), 1 oil/gas steam unit (intermediate). Coal
Unit utilizes SO2 scrubber and SNCR NOx reduction technology.
345
1,138,130
624,138
876,462
SO2
NOx
CO2
5,588
2,166
1,333,715
3,664
1,379
887,530
5,442
1,952
1,257,579
Delaware [Philadelphia, PA]
250
109,711
129,220
160,399
SO2
NOx
CO2
314
219
121,342
379
261
164,087
501
359
187,805
Eddystone [Eddystone, PA]
2 coal units (baseload), 2 oil/gas steam units (intermediate).
Coal units utilize SO2 scrubbers, SNCR NOx reduction technology
& low NOx burners with separate overfire air.
1,341
3,903,269
2,743,718
3,528,070
SO2
NOx
CO2
10,213
7,244
5,016,668
6,718
4,892
3,535,648
9,415
5,975
4,794,725
Fore River [Weymouth, MA]
688
0
0
1,446,927
SO2
NOx
CO2
0
0
0
0
0
0
4
65
840,854
1,441
1,945,836
1,527,990
1,651,387
SO2
NOx
CO2
47
1,578
1,341,420
8
1,846
1,618,853
9
830
1,396,256
Keystone [Shelocta, PA]
2 coal units (baseload), SCR NOx reduction technology.
Data reflects Exelon Generation’s 20.99% plant ownership.
358
2,678,043
2,564,230
2,611,887
SO2
NOx
CO2
33,526
4,038
2,510,074
31,615
3,821
2,418,471
34,317
2,398
2,501,247
Mountain Creek [Dallas, TX]
893
1,748,648
880,070
792,174
SO2
NOx
CO2
119
1,095
1,140,050
120
578
675,290
10
196
535,860
2,155
1,741,130
1,529,884
6,496,533
SO2
NOx
CO2
7,262
1,672
1,247,778
5,003
1,143
1,435,490
5,839
1,344
3,933,642
New Boston [South Boston, MA]
1 gas steam unit (intermediate).
353
565,551
656,201
199,135
SO2
NOx
CO2
4
665
702,708
2
424
488,296
2
101
128,496
Schuylkill [Philadelphia, PA]
1 oil steam unit (peaking).
166
44,589
42,159
41,724
SO2
NOx
CO2
131
51
45,677
149
53
49,987
125
47
46,224
2 oil steam units (peaking).
Gas-fired combined cycle unit utilizing SCR NOx reduction
technology (operational 2003).
Handley [Fort Worth, TX]
5 gas steam units (peaking/intermediate). Units 4&5
utilize SCR NOx reduction technology.
5 gas steam units (peaking/intermediate). Unit 8 utilizes
SCR NOx reduction technology.
Mystic5 [Everett, MA]
1 oil/gas steam unit (intermediate). 2 combined cycle gas
units utilizing SCR NOx reduction technology (operational 2003).
1
Table does not list Exelon plants comprised solely of peaking combustion turbines, units related to Exelon’s ownership interest in Sithe Energies, Inc., or plants in which Exelon owns less than 100 MW of capacity.
For nuclear stations except Salem, capacity reflects the annual mean rating. All other stations, including Salem, reflect summer rating.
Generation Available for Sale (GAFS).
4
Exelon Generation Company, LLC gained full ownership of Clinton, Oyster Creek and Three Mile Island on 12/22/03 when it purchased the 50% of AmerGen from British Energy that it did not already own. Data for 2001-03 adjusted to reflect 100% ownership.
5
Mystic units 4, 5 and 6 were retired in December 2003.
6
All nuclear stations are boiling water reactors (BWRs) except Braidwood, Byron, Three Mile Island and Salem, which are pressurized water reactors (PWRs).
7
Additional information on utility plants owned by Exelon and other U.S. power generation companies can be obtained at EPA’s “e-GRID” website: http://www.epa.gov/cleanenergy/egrid/.
2
3
42
2001
Hydroelectric
Plant Capacity
[MW]2
Conowingo [Harford County, MD]
GEN ERATION
2001 MWh3 2002 MWh3 2003 MWh3
Exelon Power TRI Reported Total Releases and Offsite
Transfers in 2001 & 2002 [pounds]
536
1,165,233
1,638,114
2,581,170
YEAR
1,072
1,598,971
1,549,863
1,834,582
Ammonia
2001
2002
57,605
94,679
Arsenic
71,377
70,644
Barium
135,974
109,981
13,726
14,125
3,730
0
38,969
35,813
Hydrochloric Acid
3,514,449
3,209,538
Hydrogen Flouride
345,950
307,352
Lead
20,852
19,433
Manganese
35,418
30,171
1,466
1,381
Nickel
51,995
26,665
Selenium
4,408
4,618
811,590
732,138
1,036
622
176,247
160,126
Zinc
47,797
40,863
Other
31,134
29,259
Totals
5,363,723
4,887,408
11 units (baseload)
Muddy Run [Lancaster, PA]
8 pump storage units (intermediate).
Nuclear 4,6
Braidwood [Braidwood, IL]
2,388
19,157,576
20,004,278
19,688,789
2 units (baseload)
Chromium
Byron [Byron, IL]
2 units (baseload)
2,364
20,181,956
19,307,277
20,065,461
Clinton [Clinton, IL]
1,030
7,896,568
7,680,168
8,719,496
1,742
12,671,820
13,763,412
13,819,352
1 unit (baseload)
Dresden [Morris, IL]
2 units (baseload)
LaSalle County [Seneca, IL]
2 units (baseload)
2,288
19,516,919
17,903,056
18,156,947
Limerick [Limerick Township, PA]
2,309
19,376,443
19,241,804
19,306,059
2 units (baseload)
Copper
Mercury
Oyster Creek [Forked River, NJ]
1 unit (baseload)
625
5,256,526
5,035,572
5,238,988
Peach Bottom [Peach Bottom Township, PA]
1,131
8,887,543
9,188,357
9,067,151
2 units (baseload). Data reflects Exelon
Generation’s 50% plant ownership.
Quad Cities [Cordova, IL]
Cobalt
Sulfuric Acid
1,303
9,690,327
9,232,793
10,112,162
2 units (baseload). Data reflects Exelon
Generation’s 75% plant ownership.
Thallium
Vanadium
Salem [Hancock’s Bridge, NJ]
2 units (baseload). Data reflects Exelon
Generation’s 42.59% plant ownership.
942
Three Mile Island [Londonderry Township, PA]
837
7,302,629
5,139,496
7,198,899
7,313,164
7,284,925
8,719,496
1 unit (baseload)
*Exelon will compile and report its 2003 TRI emissions to EPA after the
publication date of this report.
43
2002 | 2003 Recognition and Awards
Environment
Illinois Environmental Protection Agency’s
Partners for Clean Air 2003: Recognized ComEd
Fleet Management in 2003 for having a “Green
Fleet”in the Illinois Green Fleet Program. (ComEd)
Illinois Arborist Association Gold Leaf Award
2003: Acknowledged support of Arbor Day
programs and tree giveaway projects throughout the years and the service territory. In the
award’s 20-year history, no other utility has
received it. (ComEd)
National Arbor Day Foundation’s TreeLine USA
Award 2003: Recognition for environmentally
responsible tree care, worker training, tree
planting, and public education programs,
for the fourth consecutive year. (ComEd)
Energy User News’ Efficient Building – Best Public
Space Facility Award 2003: For completion of
several turnkey projects to help the Adler
Planetarium to reduce their energy consumption and operating costs. (ComEd)
Project Habitat Utility 2002 and 2003:
Recognized by BASF for the management of
transmission rights-of-way in a manner that
is compatible/conducive to wildlife. (ComEd)
Interstate Renewable Energy Council (IREC)
Innovation Award 2003: For its innovative
partnership with the Chicago Public Schools
to promote solar energy. (ComEd)
44
Pennsylvania Governor’s Award for Environmental
Excellence in the category of “Education and
Outreach” 2002: Recognizing the educational
Plumbing & Mechanical Contractors Association
of Northern Illinois (PAMCANI) “Commitment to
Safety” Award 2002: For improvement in lost
benefits of the Clean Mower Rebate Program.
(Exelon Power)
workday, incident rate, insurance modification
ratio, and other safety measures, which must
be better than the company’s three-year
average. (Exelon Services)
American Wind Energy Association’s Wind
Energy Market Maker Award 2002: For
effectively building a market for wind power
in the Mid-Atlantic Region. (Power Team)
Mechanical Contractors Association of America
(MCAA) Safety Awards 2002: For safety
PennFuture’s Green Team Award 2003: For
performance measures similar to PAMCANI.
(Exelon Services)
holding together an alliance that worked to
overcome local opposition to the Waymart
wind facility. (Power Team)
Green Power Pioneer of the Year Award 2003:
Awarded to Power Team’s Mike Freeman by
the Center for Resource Solutions for his
contributions to advancing the development
of renewable electricity sources in the
marketplace. (Power Team)
Safety
Energy Association of Pennsylvania Safety
Achievement Award 2002 and 2003: Presented
for outstanding safety performance. (PECO)
Energy Association of Pennsylvania Safety
Improvement Award 2002: Presented for the
best year-to-year improvement in safety
performance among Association member
companies. (PECO)
Community
Diversity Best Practices and the Business Women’s
Network 2003: John W. Rowe, Chairman and
CEO, Exelon Corporation, along with 10 other
CEOs, was named one of the most powerful
champions of diversity for his commitment
to diversity values, leadership in developing
strategic initiatives, and ongoing support of
sustainable change in the corporation.
Chicago Chapter of the Association of
Fundraising Professionals Executive Leader
Award 2003: Pamela B. Strobel, EVP and Chief
Administrative Officer, Exelon Corporation,
was recognized for her work as a fundraising
leader and philanthropist.
design: Paragraphs Design, Chicago / copy: Rector Communications, Philadelphia / editor: Bruce Alexander, Exelon Corp.
We welcome your comments and questions regarding this report. Please contact Helen Howes, Vice President, Environment, Health and Safety at the listed address or by calling 215.405.7998.
E This report was printed with soy-based inks on recycled paper containing 30% post-consumer waste.
©2004 Exelon Corporation. Exelon is a registered servicemark.
Exelon Corporation
Corporate Environment,
Health and Safety
2301 Market Street, S21-2
P.O. Box 8699
Philadelphia, PA 19101-8699
www.exeloncorp.com